Revisiting a concept for the first time since 2009, a House of Representatives Sub-Committee recently conducted a hearing regarding the Working Families Flexibility Act (H.R. 1406). The Act, proposed on April 9, seeks to amend the FLSA to permit private sector employers to compensate employees for overtime work by providing compensatory time off (e.g., “comp time”), in lieu of cash overtime wages. Under current law, only public sector employers are allowed to make such payments in lieu of overtime pay. 29 U.S.C. § 207(o).

Supporters cite the flexibility, particularly for working families, that the availability of comp time provides. On the other hand, detractors claim that permitting payment for overtime work via time off will unfairly reduce the wages currently earned by non-exempt overtime eligible workers. 

“In amending the FLSA to permit public sector employers to provide compensatory time off, Congress implicitly acknowledged the strain on public budgets imposed by a cash overtime requirement,” observed former Wage and Hour Administrator Paul DeCamp. “The proposed bill acknowledges that the same budgetary strain attaches to overtime work for private sector employers, many of whom are small or medium-sized businesses regulated by the FLSA through its expansive coverage provisions.”

While previous efforts to pursue such a rule change were unsuccessful, prevailing economic conditions may force Congress to give more consideration to the proposal than in prior years. Watch this space for further developments.